Chapter 13 or Short Sale?

[merrr]

If you were against the wall and had to decide would you choose to file for Chapter 13 bankruptcy and keep your house or put the house on the market as a short sale?

[dara1012]

I would do short sale, it affects your credit for a shorter amount of time.

Hugs to you! Sorry you have to be worrying about this

[merrr]

Thanks dara, it is a crappy situation to be in but it is what it is. :/

[angel22]

Short sale, no question!

[bumblebee23]

if you do a short sale are you unable to file bankruptcy after that? Also in a short sale are you still responsible for the sale vs. what you still owe or does it wipe it out? I don't know how all this works but those are things to consider and if you would be able to manage the payments that you still owe the bank.

Chapter 13 will wipe out all your debt not just your house so if you have other bills stacked up that you are having a hard time paying those would get wiped out too. Good luck hun I know this has been super hard on you!

[laurac]

I'm sorry you have to deal with this, Merrr. I'm thinking about you.

[ReneeW]

I'm not knowledgeable enough to say ... but I'm sending prayers your way for wisdom and guidance. Hang in there.

[apryllraye87]

Thinking of you Merrr <3

[deannemdm]

I had a friend do short sale about 2 yrs ago (too soon for them to file bancruptcy again). They had to pay income taxes on the total difference between what was owed and sale price. Don't know too much else about process-- other than depending on your lender -- it may depend on how willing they are to accept a short sale-- some places can be sticklers-- and it can get drawn out.

[Susan824]

I'm not sure which is better.

At work last Thursday, I heard that the new Consumer Financial Protection Bureau (CFPB) has assisted some consumers with working out agreements with their banks (even the lenders who previously refused to compromise on the terms of the mortgages).

Here's the site URL if you want more info >>> www.consumerfinance.gov/mortgagehelp

Hang in there, Merrr

[camilla]

We just got done short selling our home. First we had to jump through hoops with the bank. They had a lengthy list of items we had to do to be approved to short sell our home. We stopped paying our mortgage and it took about 6 months before they approved moving forward with a short sale. Then we found a realtor. It took about 6 months again from the buyers offer came through until the purchase went through b

With a short sale the bank "forgives" the difference in the selling rice and what you owe. They will send you a 1099 so you can declare the difference as income. However, part of Obama's stimulus package included a way to turn the 1099 around onto another form so it was not taxed as income. Our CPA took care of all of this for us.

Be prepared to take multiple daily phone calls from the bank and make sure you are not changing your story with them. Also be prepared that if you have PMI they can force you to sign a promissory bite stating you owe the PMI company a certain amount. We had to do this but our real estate attorney said defaulting on a $20,000 note was better than defaulting on our $220000 loan so we signed the note and since we do not have the money to pay the note we will just have to put up with phone calls from collection agency about it.

You can send me a message if you have any questions I might be able to answer.

Good luck!